Real News‎ > ‎2014‎ > ‎September 2014‎ > ‎

29th September 2014

Singapore Real Estate

Downtown home prices take a big hit

More sold at loss, bigger drop in prices than in old prime districts

Source: Straits Times / Money

AS THE luxury residential segment flounders, properties in the Downtown area have taken an especially big hit.

More loss-making transactions have occurred in this area so far this year, compared with last year. Fewer profit-making transactions have taken place.

Resale prices in the area have also fallen faster than those in the traditional prime districts, reflecting its status as a less established high-end residential area.

According to data compiled by ST Property, there were seven loss-making transactions in the Downtown area in the first eight months of this year.

They ranged from a $60,000 loss from the resale of a 1,130 sq ft unit at Marina Bay Residences last month to a $343,200 loss from the subsale of a 506 sq ft unit at Robinson Suites in April.

In comparison, there were just two such transactions in the same period last year - a $30,740 loss from the resale of a 667 sq ft unit at The Sail in January and a $82,400 loss from the resale of a 1,184 sq ft unit, also at The Sail in the same month.

The number of profitable transactions slid from 37 in the first eight months of last year to 27 in the same period this year.

The average annualised profit margin from profitable transactions fell as well, from 9.4 per cent a year in the first eight months of last year to 4.83 per cent a year in the same period this year, said SLP International executive director Nicholas Mak.

He added that there was a higher risk of suffering a loss on an investment in a one-bedroom unit this year as five out of seven loss- making deals over the two time periods involved investments in one-bedders (60 sq m, or about 646 sq ft, or smaller).

Mr Mak noted that in the first eight months of this year, for 11 out of 34 units sold in District 1, rentals would have been unable to cover the assumed mortgages, assuming median market rents. This compares with five out of 39 sales over the same period last year.

Owners putting up high-end residential units for resale may also be feeling the strain of competing with developers with ample unsold stock, said R'ST Research director Ong Kah Seng.

Developers may be offering attractive discounts, or even renting out units instead of selling them. "This impacts owners who are investors, so their best choice would be to sell the unit away at a loss," he said.

Resale prices in the Downtown area have fallen by about 8 per cent over the past year, whereas resale prices in Districts 9 to 11 fell about 5 per cent over the same period, Mr Ong noted.

Prices are steadier in Districts 9 to 11 as they are more established as exclusive areas, said Mr Ong. "Owners (in these areas) are more willing to hold on to the properties even as prices decline 'on paper' - they take pride in their property's established location."

He noted that units in traditional prime districts are also usually larger, a reflection of the fact that their owners are typically wealthier. All 330 units in Ardmore Park, for example, are 2,885 sq ft.

In comparison, condominiums in the Central Business District usually comprise a mix of small, average and large units.

"When the overall high-end residential segment plunges, those newer high-end residential localities without an entrenched positioning might see prices falling faster," said Mr Ong.

-Rennie Whang

Resale prices of private homes mostly unchanged: SRPI

Resale prices of private homes, together with prices of homes in the central region excluding small units, remained unchanged from July, according to NUS SRPI flash estimates.

Source: Channel News Asia / Business

SINGAPORE: Resale prices of private homes ended mostly unchanged in August according to Singapore Residential Price Index (SRPI) flash estimates, which were released on Monday (Sep 29).

The SRPI, compiled by the National University of Singapore's Institute of Real Estate Studies, showed overall prices had no change in August from the previous month. In July, prices went up 0.1 per cent from a month earlier.

Prices of small unit homes rose 0.1 per cent in August from the previous month. A small unit has a floor area of 506 square feet or below.

Prices of homes in the central region in August, excluding small units, remained unchanged compared to July. However, home prices in the non-central region dipped 0.1 per cent on-month. These figures exclude prices of small units in the non-central region.

- CNA/av

'Budget' airport hotel going for high-end

Source: Straits Times / Top of The News

CONSTRUCTION work has started on a 10-storey hotel that will rise near Changi Airport Terminal 3 about a year from now.

But instead of being built for budget-conscious travellers as was earlier planned, it will cater to a higher-end market where demand is strong and yields are higher, The Straits Times has learnt.

It will be built by property developer Overseas Union Enterprise (OUE), which owns the 320-room Crowne Plaza located next to the new site.

Both buildings will be linked via a 40m-long air-conditioned bridge, and operate as a single entity, offering a similar level of service, OUE's spokesman told the paper.

There will be no swimming pools, restaurants or other facilities at the new wing, "just rooms", the spokesman added.

Ample facilities at Crowne Plaza and Changi Airport offer plenty of food and beverage, as well as shopping options.

When plans for the new hotel were first announced more than three years ago, the intention was for a three-star sort of establishment, meant for low-cost travellers who had been driving much of the growth at the airport.

This followed the end-2008 global financial crisis when trade sentiments were weak and firms were scaling back on corporate travel.

Since then, business travel had picked up strongly, which has in turn boosted occupancy rates at Crowne Plaza. The hotel charges $260 to $280 per room per night, excluding extra charges.

Last year, it filled an average of 88.4 per cent of its rooms, higher than the industry average of 86.3 per cent.

OUE is confident there will be demand for the 243 rooms that will be added when the expansion is completed in the fourth quarter of next year.

The hotel, which offers conference and other business facilities, is especially popular with corporate clients, added the spokesman. "Companies would fly their executives here and conduct their meetings at our hotel. The savings are huge in terms of time and costs because you don't have to put someone in a taxi to some other place and back again for the return flight."

With Singapore as a top destination for meetings, and the Mice (meetings, incentives, conventions and exhibitions) industry expected to continue to grow strongly, the demand for business hotels and facilities is expected to stay strong, said Ms Alicia Seah, spokesman for travel agency Dynasty Travel.

The use of advanced construction methods will allow Crowne Plaza to meet some of this demand earlier than expected. In line with a government push for the use of technology to boost productivity in the building sector, OUE, together with its construction partners Dragages Singapore and Unitised Building from Australia, will take about 70 per cent of the works off site.

The rooms - complete with internal finishes, fixtures and fittings including carpets - will be built in a factory in Shanghai, China, and shipped to Singapore.

Mr Richard Hassell, founding director of Woha, the architectural firm working on the project, said: "In this way, we are able to cut total construction time by about half and manpower needs by 75 per cent. There will also be less noise and dust at the site, and fewer lorries and other construction vehicles going up and down."

-By Karmajit Kaur, Aviation Correspondent

Local conservation experts in demand

Their advice is increasingly sought on historic projects across the region

Source: Straits Times / Singapore

LOCAL conservation experts have been zipping across the region to give advice on historic building projects in places ranging from Myanmar to Calcutta and Penang.

This is a far cry from the mid-1990s, when conservation expertise in Singapore was in its infancy and developers and building owners depended on overseas experts for advice.

Now, the tables have been turned, and experts in the field include architectural conservation specialist consultant Ho Weng Hin and architectural conservator Yeo Kang Shua.

Mr Ho, for instance, was engaged by a private developer from Myanmar last year to consult on the restoration of the late 1880s Burma Railway headquarters.

"My familiarity with best practices in conservation puts me in good stead for this," said Mr Ho, 40, who was also technical adviser to the restoration of St George Church in Penang, the oldest Anglican church in South-east Asia.

Today, there are at least five experts like Mr Ho, about 10 architectural firms specialising in conservation and consultancy, and between 15 and 20 conservation contractors.

The Urban Redevelopment Authority (URA) said the the Architectural Heritage Awards - now into their 20th year - had a role in the growth of the field.

The awards, the first in South-east Asia, have helped raise conservation standards, noted Mrs Teh Lai Yip, URA's senior director of conservation.

She gave the example of the century-old, award-winning Hong San See temple in Mohamed Sultan Road.

The team behind the effort, which included Dr Yeo, did careful research to restore the temple's wood carvings and gold leafing, among other things.

Some 117 projects have been given awards since 1995.

Dr Yeo, 39, an assistant professor at the Singapore University of Technology and Design, said the URA awards have contributed to the wider appreciation and awareness of the country's built heritage.

The authority said it will be putting together a database of technical conservation information, with input from professionals, such as the types of chemicals or materials used to preserve an old building, on its conservation portal.

Dr Yeo, who was part of a team that designed an award-winning elementary school in the historic district of Lijiang, China, in 2005, welcomed this move.

He said: "Over time, a technical database will be built up and we will be able to track the efficacy and appropriateness of different building treatments."

-By Melody Zaccheus

Terraced house still a challenge to maintain

Source: Straits Times / Singapore

WHEN architect Daniel Teo bought an 80-year-old terraced house back in 1989, he had several challenges, including having to fix a side wall with very porous bricks.

Mr Teo, now 71 and chairman and managing director at Hong How Group of Companies, spent $500,000 on the terraced house at 11 Kim Yam Road. Works included waterproofing its brick walls and strengthening its foundation.

Decades on, the house still keeps Mr Teo on his toes - water tends to seep through to its inner walls whenever it rains. "It's like that with older buildings. We also have to take care of the cracks that form due to ongoing construction works nearby," said Mr Teo.

The restoration of the two-storey house was one of six buildings which won the Urban Redevelopment Authority's Architectural Heritage Awards in 1995.

URA said that the restoration had kept closely to the original charm and spatial quality of the building.

Real Estate Companies' Brief

OUE to invest US$200m in GIC-backed fund

Source: Business Times / Companies

OCBC Bank, the first bank here to allow customers to open a deposit account through an application on smartphones without having to visit a branch, saw over 8,000 accounts opened via the app since it was launched in April this year. This makes up around 15 per cent of over 60,000 OCBC 360 Accounts opened over the six-month period, said OCBC in a statement. Among customers who have used this app to open their accounts, over 80 per cent are new-to-bank. They are mostly professionals, managers, engineers and technicians, from 23 to 35 years old.

Views, Reviews & Forum

Waive resale levy for elderly flat buyers

Source: Straits Times / Forum Letters

WHAT elderly flat buyers need is a waiver of the resale levy on their new flats ("Pay less cash upfront for small BTO flats"; last Thursday).

Currently, if flat owners wish to downsize, they have to pay a resale levy of $40,000 if they have a four-room flat, or $45,000 if they have a five-room flat.

This is not a small amount for the elderly, and any savings from staggered down payments pale in comparison.

Those buying studio apartments are exempted from the resale levy. Why can't the HDB do the same for two- or three-room flats?

Also, according to the report, to be eligible for the scheme, buyers should not have completed the sale of their existing flats when applying for the new ones.

But what if they cannot sell their flats in time when their new flats are ready?

The HDB should allow them to sell their flats first before applying for a new one.

If the new flat is not ready by the time the current flat is sold, the HDB should offer a rental unit at a subsidised rate.

It would be hard for the elderly and the poor to monetise their flats if they have to pay the resale levy and cannot sell their flats beforehand.

The Government should be more flexible in its policy.

-By Francis Cheng

Time, effort wasted in bid to learn new trade

Source: Straits Times / Forum Letters

IN JULY, I wrote to the Council for Estate Agencies (CEA) to ask how I could register as a real estate salesman while working full time in another trade.

I stated that I wished to be a licensed real estate salesman, but did not intend to practise as one.

The CEA replied that I had to get a written notice of declaration from my full-time employer, stating its agreement to my application for a licence from a real estate agency.

The council had some issues with the first notice I submitted, so I obtained and submitted a second one.

My application dragged on for weeks, interspersed with queries from the CEA, which eventually rejected it on the grounds that I had full-time work commitments.

I was furious when I heard this.

The CEA should have told me I would be rejected after I sent my first e-mail, instead of making me waste so much time and effort to obtain letters and approval from my employer.

Furthermore, before my application, I had looked at the CEA website for the requirements of the application.

It did not say that registered sales staff must practise in the trade after they pass the Real Estate Salesperson Examination and obtain a licence.

The CEA's non-transparent policies mean that those who apply for a real estate sales staff licence for the sake of picking up additional skills have wasted their time and money.

This goes against the Government's call for Singaporeans to upgrade themselves with more skills and knowledge.

-By Winston Cheng Kheng Sen

Global Economy & Global Real Estate

Arctic land sale to China tycoon raises red flags

Rumours swirl over Beijing's aim to seek foothold in resource-rich area

Source: Straits Times / World

LONGYEARBYEN (Norway) - For anyone in the market for a majestic waterfront property with easy access to the North Pole, Mr Ole Einar Gjerde has a deal. "We will throw in the polar bears for free," said Mr Gjerde, pitching the attractions of a huge tract of Arctic land 21/2 times bigger than Manhattan but considerably less noisy. It has a human population of zero.

But the sale of the property, across a fjord from Longyearbyen, the capital of Norway's northern-most territory, has kicked up a noisy storm fed by alarm over the Arctic ambitions of a Chinese real estate tycoon with deep pockets, a yen for ice and a murky past working for the Chinese Communist Party.

Mr Huang Nubo, rebuffed last year in his bid to buy a tract of wilderness in Iceland, has turned to Norway. This summer he reached a preliminary deal to buy a large waterfront plot for about US$4 million (S$5 million) near the northern city of Tromso and, Norway's state-owned broadcaster said, is also eyeing a bigger and more northerly property on Spitsbergen, the main island in the Svalbard archipelago.

Mr Huang's company, Beijing Zhongkun Investment Group, denied reports in the Norwegian news media that it wants to buy land in the high Arctic, and said it is focusing instead on plans for a luxury resort in Lyngen, a mountainous area on the mainland near Tromso. That project, though on land farther south than Svalbard, still puts Mr Huang's company inside the Arctic Circle and has set off a heated debate about his intentions.

"No need to doubt that billionaire Huang Nubo is a straw man for the Chinese Communist Party and the country's authorities," warned a commentary in Nordlys, northern Norway's largest newspaper.

Mr Ola Giaever, the seller of the property near Tromso, said he had "100 per cent confidence" that Mr Huang was a straight-up businessman with no hidden agenda.

But such assurances have done little to calm a frenzy of speculation about China seeking a permanent foothold in the Arctic, a region of growing geopolitical and economic significance as global warming opens new and cheaper shipping routes from Asia and also expands the prospects for exploiting the Arctic's abundant natural resources.

Hungry for energy, China has "openly declared its Arctic ambitions", said Mr Willy Ostreng, president of the Norwegian Scientific Academy for Polar Research, noting that Beijing had invested in an icebreaker, the Snow Dragon; sent scientists to Svalbard to join teams of international researchers; and successfully lobbied to become an observer at the Arctic Council, a grouping of nations with Arctic land, including Norway, Russia and the United States.

China has also tried, so far without success, to get permission to build a large radar antenna on Svalbard. It has even declared itself a "near Arctic state", a big stretch as even its northern-most region is over 1,600km from the Arctic Circle.

The Arctic region, according to the US Energy Information Administration, holds around 13 per cent of the world's undiscovered oil and 30 per cent of its natural gas, reserves untouched because of the difficulty and high cost of their development.

Russia, which plans to invest US$400 billion in Arctic exploitation over the next 20 years, believes the region has even more promise, though these plans could be disrupted by Western sanctions imposed over Ukraine.

Mr Igor Sechin, head of state oil company Rosneft, said Moscow, despite its increasingly warm ties with Beijing, was uneasy about China's push into the Arctic, warning that Russia faced "plenty of competition", not only from nations with well- established Arctic claims like Canada, Norway and the US, but also "countries which seem to be far from the Arctic", including China and "even Singapore", 7,200km from the Arctic.

"The struggle for resources is getting tougher," he said.

-By New York Times

Emaar Taps Stock Boom in Dubai’s Biggest IPO in Seven Years

Source: Bloomberg / Personal Finance

Emaar Properties PJSC (EMAAR), Dubai’s only listed developer to survive the property crash without an annual loss, plans to sell shares in its hotel business after its malls unit became the emirate’s biggest public offering since 2007.

The company will announce the hotel sale “in the next few months,” Chairman Mohamed Alabbar said at a conference in Dubai today, less than seven hours after Emaar said it raised $1.6 billion from the share sale of its malls unit. Alabbar declined to provide more details on the IPO.

These companies “reflect the true contributing sectors of Dubai’s economy,” Tariq Qaqish, head of asset management at Dubai-based Al Mal Capital PSC, said by phone from Dubai. Because of high occupancy levels and “proximity to malls, Emaar Hotels translates to solid revenue per room,” he said.

The Emaar Malls IPO was the largest in the United Arab Emirates since port operator DP World Ltd.’s $4.96 billion offering in 2007. A retail boom spurred by an increase in tourist arrivals is helping propel growth in Dubai. About 75 million visitors passed through Emaar’s flagship Dubai Mall last year, while the emirate’s economy is forecast by the International Monetary Fund to expand about 5 percent this year.

Investor Demand

Emaar Malls Group shares were priced at 2.9 dirhams, at the top end of the range. The order book was more than 30 times oversubscribed for the institutional segment, and more than 20 times for the shares sold to individuals even at its most expensive, according to an e-mailed statement earlier today.

“There’s definite interest in Dubai’s retail sector, hence a lot of institutional interest from outside the region,” Saleem Khokhar, head of equities at NBAD Asset Management Group, which oversees about $2.5 billion, said by phone from Abu Dhabi. “I’m very confident that secondary market trading will be very positive.”

The developer of the world’s tallest tower, which sold 15.4 percent of the unit in the IPO, plans to distribute 5.3 billion dirhams ($1.44 billion) of the sale proceeds as dividend to its shareholders, including Dubai’s government. The company’s shares dropped 0.9 percent to 11.45 dirhams at the close in Dubai.

Emaar Malls’ market capitalization at listing will be about 37.7 billion dirhams, the company said. Its estimated investment properties is 20.4 billion dirhams as of the end of September, with a share capital of 13 billion dirhams, it said in the statement. The unit’s stock will start trading in Dubai on Oct. 2.

Rising Index

Emaar’s malls, retail and hospitality units combined contributed 2.65 billion dirhams in the first half of this year, accounting for more than half of Emaar’s total revenues. Revenue for the hotels and leisure unit was 893 million dirhams, a 16 percent jump from a year earlier after its flagship Address Hotels + Resorts posted an occupancy rate of 89 percent for the period, the company said on Aug. 4.

Dubai’s benchmark stock index is the second-best performer globally, rising 48 percent this year, prompting share sales by companies such as Marka PJSC, which started trading last week. Emaar received orders to cover the stock allocated to institutional investors within the first two days of the offering, while individuals queued at the exchange for hours to submit their bids.

Bank of America Merrill Lynch, JPMorgan Chase & Co. and Morgan Stanley were the joint global coordinators and bookrunners on the deal. HSBC Holdings Plc, EFG-Hermes Holding SAE, National Bank of Abu Dhabi PJSC, Emirates NBD PJSC, Emirates Financial Services PSC and Rothschild also helped manage the sale.

-By Sarmad Khan, Arif Sharif and Deena Kamel Yousef

Iran-Born Billionaire Hakim Emerges With NYC Properties

Source: Bloomberg / Luxury

Billionaire Kamran Hakim was late, and New York Supreme Court Justice Eileen Bransten wanted to know where he was.

“They’re coming up,” Hakim’s attorney, Leo Fox, said to Bransten, according to a court transcript. “In fact, he just asked me what room number it was.”

Hakim arrived to find two of his brothers and their attorneys waiting in the downtown Manhattan court room. Bransten asked him to remove his hat.

It was Friday, Jan. 24, 2014, eight years, five months and five days since Said Hakim, Kamran’s brother, had filed a lawsuit accusing Kamran of hoarding income from four properties they jointly owned with their brother Masud, and of selling three of those buildings without his consent.

The case touched on a sliver of Kamran Hakim’s Manhattan real estate empire that’s more than 40 years in the making. Since emigrating from Iran, he’s come to control through limited liability corporations at least 129 buildings with 2.7 million square feet valued at $1.8 billion, according to the Bloomberg Billionaires Index. The 73-year-old has never appeared on an international wealth ranking.

Hakim said in a sworn affidavit that Said contributed nothing to the purchase or maintenance of the buildings and received income from them because Kamran wanted to help him in his transition to the U.S.

High Stakes

“He is a ‘partner’ only because of my commitment to him as my brother,” Kamran said of Said in the November 2005 affidavit.

Said was unable to produce some documents the court said that he needed to prove portions of his case. They were lost when he fled Iran during the revolution in 1979, according to testimony from Ian L. Blant, who represented him in the case in 2005.

By the time they reached the courtroom in January, Said’s case was limited to a dispute over 536 East 89th Street, a brown-painted, five-story, 25-unit apartment building with a floral still life in its narrow entryway in New York City’s Upper East Side. Claim to the other properties had been tossed out by another judge, Karla Moskowitz, who told attorneys in the case that the fight shouldn’t be in court at all, according to a Dec. 15, 2005, transcript.

Family Feuds

“This is all family,” Moskowitz said.

Judge Bransten, noting how much they were spending in attorneys fees, also encouraged the brothers to settle.

“My jury room is heated,” Bransten said. “I should have made it freezing to make you get it done quicker.”

Kamran and Said failed to reach a deal. Masud agreed to sell his stake in the building to Kamran for an undisclosed sum, removing himself from the suit.

Family feuds have been a theme for the billionaire. He was sued by Said’s son Isaac in 2010. His son-in-law Robert Jaffe, who’s in divorce proceedings with his daughter Wendy, served 37 subpoenas to Kamran’s LLCs -- 32 of which were quashed -- in an effort to determine her ownership interests in the companies. All the cases touch on his collection of properties, mostly walk-up apartment buildings shorter than six stories, in Manhattan’s Upper East Side, Upper West Side and Midtown neighborhoods.

Manocherian Family

“There is no desire on our part to comment further on these family matters,” Charles A. Stillman, an attorney for Kamran at Ballard Spahr Stillman & Friedman LLP, said in a phone interview. “We have no interest in talking publicly about the valuation of the portfolio.”

Calls to Said’s office at SM Management in Beverly Hills and his attorney at CPS&S LLP in New York weren’t returned.

Prior to the revolution in 1979, the three Hakim brothers owned importing businesses and a refrigerator factory in Iran, according to Masud’s testimony. Letters between Said and Kamran show they both lost assets in the revolution.

In 1998, after spending $1 million on lawyer fees, Kamran was awarded $1,582,569 for damages by the Iran-United States Claims Tribunal, according to his sworn affidavit in Said’s case. Said’s original complaint also laid claim to the funds.

“After deducting the fees and expenses, there are no real amounts of any significance that are available to be disbursed to Said,” Kamran said in his affidavit.

Kamran is married to Ellen Manocherian, a member of the Manocherian family that controls at least 85 buildings in Manhattan through companies named Pan Am Equities and Manocherian Brothers, according to public records. The family’s properties include The Langham, a 13-story building at 135 Central Park West, which they purchased in 1952.

Amsterdam Avenue

The luxury building’s apartments occupy the entire park-facing side of the block between 73rd and 74th streets. Ellen owned 16 percent of the building through Langham Mansions Co., a family partnership, according to 1998 financial statements.

He began purchasing Manhattan real estate as early as 1969, according to his deposition in Said’s case. Of the properties owned by his LLCs, at least three were obtained as early as 1972. The four-, five-, and six-story residential buildings in Manhattan’s Upper East Side neighborhood were bought for prices ranging from $13 to $23 a square foot. Residential real estate in Manhattan now sells at an average of $1,268 per square foot, according to a research report by Douglas Elliman.

Central Park

Kamran’s LLCs own every property on the west side of Amsterdam Avenue between 91st and 92nd streets: seven ornately-decorated five-story apartment buildings with storefronts on the ground floor. They were purchased in 1998 for $53.6 million at an average of $730 per square foot.

On the other side of Central Park, the LLCs own seven more five-story walk-ups with ground-level stores between 90th and 91st Streets on the east side of 1st Avenue. Five of those were purchased at an average of $25 per square foot in 1979. Another, purchased in 1988, went for $101 per square foot, and another in 1997 at $84 per square foot. Kamran is one building short of controlling the full block.

On the south side of East 34th Street between 2nd and 3rd Avenues, Kamran demolished a tranche of buildings to construct the 21-story, 483-unit, 506,520-square-foot Anthem. He spent $150 million to develop the luxury elevator building, according to a 2003 report from the New York Times. He still owns three red five-story walk-ups adjacent to the tower.

‘Family Man’

“He’s a powerful guy,” said Jim Marinaccio, the owner of Naga Antiques which had occupied the storefront at 145 East 61st Street, a Hakim building, for 32 years through August. “He’s extremely charming, extremely fair, he loves the arts and he’s a real family man.”

Kamran personally negotiated Naga’s rent, Marinaccio said.

The billionaire and his wife live in Chappaqua, New York, a wooded hamlet north of New York City. They also own two horse-show venues, Old Salem Farm and Grand Central Farm, with their son Scott. The couple run the Old Salem Farm Foundation, which had $117,590 in assets in 2012, according to a tax filing. Donors including billionaire John Catsimatidis and JP Morgan Chase & Co. gave a combined $89,000 during the year.

The foundation, started in 2011, made no charitable contributions in 2012 and spent $179,680 on tent rentals and $9,461 on catering, according to the filing. It will support the Voss Foundation, Pegasus Therapeutic Riding, ASPCA and Just World International this year, according to its website.

Opportunity Knocks

While Said’s case was being argued in 2008, his son Isaac received a letter from Ronald S. Greenberg, an attorney for Kamran.

“You are not now, never have been, and never will be a member of the LLC,” Greenberg said.

The LLC in question was formed to manage 41 West 57th Street, an eight-story office building two blocks south of Central Park. Isaac identified an opportunity to manage the property and brought it to his uncle, who created a company to pursue the deal, judge Shirley Werner Kornreich of the New York Supreme Court said in a case Isaac brought against Kamran in 2010.

Kamran and Isaac set up an arrangement whereby Isaac could purchase one-third of the company within the next two years. Isaac sent a letter to his uncle by overnight delivery exercising his ownership option two years later. Kamran’s representatives stalled the process, Issac alleged in his lawsuit, and he never got his shares.

‘Foolish Litigation’

While he waited, “he located tenants, negotiated subleases, and managed the day-to-day operation of the property,” according to a May 2011 decision by Kornreich.

“Your father commenced foolish litigation against Kamran,” Greenberg’s 2008 letter to Isaac said. “Surely, if you choose to commence litigation here, you will follow precisely in your father’s misguided footsteps.”

Isaac sued anyway, waiting two years because Kamran had been a father figure and mentor to him, and he loves and respects him, he said in a phone interview. It also appeared the matter would be resolved, according to his attorney, Cabot Marks.

Kornreich ruled that Isaac’s claim to his shares was still valid because of e-mails sent by Kamran’s lawyers in 2005 and 2008, and that he could sue the LLC.

On Aug. 5, Kamran and Isaac signed a confidentiality agreement. The case is still being argued, Marks said.

“I think the last thing you would ever want to do is to get into any type of litigation with someone you respect so much,” Isaac said.

-By Caleb Melby

ClubCorp Said Urged by Shareholders to Pursue Conversion to REIT

Source: Bloomberg / News

ClubCorp Holdings Inc. (MYCC), the largest owner of private golf and country clubs in the U.S., is being urged by shareholders Red Alder LLC and ADW Capital Partners LP to convert itself into a real estate investment trust.

Red Alder and ADW Capital are pushing ClubCorp, which went public a year ago and is still controlled by private equity firm KSL Capital Partners LLC, to form a special board committee to explore all alternatives, the funds said today in a letter to independent board members. The funds have amassed a combined stake of less than 5 percent and formed a group that has held talks with ClubCorp’s management as well as other investors, said people familiar with the holdings, who asked not to be identified because the details aren’t public.

Spinning off real estate into a separate property company or converting into a REIT holding company would enable ClubCorp to boost dividends and lower its interest costs, and could put it in a better position to buy other clubs and courses, according to the letter. ClubCorp’s shares could be worth $31 to $36 apiece, and low interest rates and tax advantages make exploring the possibility urgent, the funds said.

The shares rose 5.2 percent to $19.71 as of 2:36 p.m. in New York trading today, giving the company a market value of about $1.3 billion.

ClubCorp last month announced it agreed to buy Sequoia Golf Holdings LLC, a deal that will add 50 clubs.

REITs, which get their primary income from real estate, generally trade at higher valuations because of tax benefits, and because they’re required to distribute almost all earnings to shareholders as dividends. A REIT would allow the company to unlock the value of its real estate, diversify its holdings and pursue additional partnerships, according to the letter.

Leisure REITs

Activist investors are increasingly targeting leisure companies and other firms with large real-estate holdings for similar changes. Marcato Capital Management LP in May disclosed a stake in gym operator Life Time Fitness Inc., and Orange Capital LLC amassed a position in casino ownerPinnacle Entertainment Inc. (PNK) in April, urging it to pursue a REIT structure. Penn National Gaming Inc. last year spun off most of its real estate into a REIT similar to what is being proposed by Red Alder and ADW Capital, creating Gaming & Leisure Properties Inc., the first casino real estate investment trust.

Frank Molina, a spokesman for ClubCorp, said the company told investors on its last two earnings calls that it “continues to evaluate REIT strategies” and will make decisions based on the interests of all shareholders. ClubCorp doesn’t have any further updates at this time, Molina said.

Retail Targets

Red Alder is also waging an activist campaign at retailer Ann Inc. (ANN), where together with Engine Capital LP it’s urging the owner of the Ann Taylor and Loft chains to review its strategic options including a sale. ADW Capital, a hedge fund founded in January 2011, has previously targeted companies including Lorex Technology Inc. and USA Truck Inc.

KSL Capital, a private-equity firm focused on travel and leisure that acquired ClubCorp in December 2006, owns about 51 percent of the Dallas-based company. Founded in 1957 with one country club in Dallas, ClubCorp today owns or operates 160 clubs in 26 states, the District of Columbia and two other countries that combine to serve 370,000 members.

-By Beth Jinks